Fraport sets June date for Delhi exit

New Delhi, Oct. 31: Fraport AG — the world’s second largest airport operator — today said it would exit Delhi International Airport Ltd (DIAL) by June through a sale of its entire 10 per cent stake.

The company is in talks with its joint venture partner GMR Group.

Fraport’s seven-year agreement to operate the airport will expire in June. The German company picked up a 10 per cent stake in DIAL in 2006 as part of a consortium formed by GMR Group after bagging the concession agreement from the government.

“We expect the process of selling our 10 per cent holding in the Delhi airport to be done by June,” Fraport vice-president for global investments Kai Zobel said. This will mark the complete exit of the German firm from the country. Earlier, it had said it would shut down its development centre in India.

Fraport’s supervisory board at a meeting in September 2011 had “approved” the stake sale in Delhi’s Indira Gandhi International Airport. Fraport had said the lack of confidence in the government’s ability to go ahead with infrastructure development had forced them to think of exiting India.

“We had some re-assessment and realised that this government doesn’t have any spine or drive. So I personally doubt that anything will happen in the lifetime of UPA-II,” Fraport India managing director Ansgar Sickert had earlier said.

“We are open to exiting from DIAL. We do not do purely financial investments. We will have to see what happens after 2013, when the operator role ceases, if it will be renewed or DIAL itself will be the operator. If we can’t add value, there is no point for us to stay,” he had said.

According to the company’s officials, Fraport does not see sense in being a passive shareholder with a board position.

However, Zobel said the company was open to further investments in this country but wanted a clarity on policy.

Fraport is keen on the proposed Navi Mumbai airport. “But we do not want to simply play the role of an equity player.”

Earlier this month, GMR Group had been quoted as saying in a section of the media that it was ready to buy out its partners in DIAL.